Understanding Landlords and the PRS: An Open Letter to The Scottish Government

Something a bit different to start April, and no, it’s not an April Fool.

On May 7th, 2026, Scotland will go to the polls to elect Members of the Scottish Parliament – MSPs. One of the critical issues that will face the new parliament is the ongoing housing crisis in many parts of Scotland.

Despite the impression that homes are being built everywhere in Scotland, the fact is that the numbers are still far too low. Consequently, the PRS – the Private Rented Sector – has played and will continue to play a crucial role in providing homes.

Despite this, landlords are still looked down upon and too many see rented properties as wasted properties. The Scottish Government doesn’t offer any significant benefits to encourage individual landlords, indeed it penalises them.

As property professionals of long-standing in Scotland, we would like to take this opportunity to encourage all candidates to understand the importance of the PRS in the context of housing in Scotland.

The numbers

• The PRS consistently supports around 14% of all households in Scotland.

• As of August 2025, the Scottish Government reported that there were 232,196 registered landlords, responsible for 348,128 properties in Scotland.

• As of March 2024, the social housing sector supports approximately 24.8% of households in Scotland.

• Owner-occupied households and unoccupied properties account for the remainder, circa 61%.

• In total there were 18,347 newbuild homes completed, and 14,846 new build homes started in the year to the end of September 2025. This includes social sector led and private sector led new build completions and starts.

• That’s 0.72% of the total number of households in Scotland.

• There are 43,538 homes in Scotland which have been empty for more than 6 months.

The PRS is not the cause of the housing crisis in Scotland; a lack of home building is.

Home ownership for all

There is an underlying narrative that the goal of everyone is homeownership. In part this is derived from the trope that “an Englishman’s home is his castle” but more practically from the Thatcherite Right to Buy policy.

Prior to that fundamental shift, many in Scotland and the wider UK were quite willing to rent their homes long term. Right to Buy suddenly presented tenants with the opportunity to buy a home, often at a substantial discount.

In one fell swoop local authorities lost housing stock, while not making enough to replace it, and homeownership became di rigeur. Scotland ended this practice on the 31st of July 2016.

This shift, along with a lack of housing stock has given rise to an attitude that sees rental stock as “wasted housing”, in the sense that they’re not available for sale on the open market.

This view blithely ignores the fact that those properties are not for sale because they are already occupied, that they are someone’s home and that they may have lived there for years, with no intention of moving.

It’s an odd mindset which regards landlords, and, by implication, their tenants as merely an unwelcome block to making a property available for sale.

It’s telling that the same argument isn’t as often applied to the 43,538 empty homes in Scotland as of September 2024.

This narrative has persisted, but renting, regardless of whether social or private, is not simply a rite of passage en route to buying a home. Many people prefer to rent, and there are many reasons for doing so.

Why rent?

In a word; flexibility. There are many people for whom buying a property would be an unnecessary burden. 

They may be moving to pursue a career opportunity, but have no intention of staying in the area long term. Renting makes sense, allowing them to stay as long as required whilst making moving on far easier.

They may not want the financial responsibilities that come with ownership.

There’s a good reason first-time buyers refer to themselves as ‘home moaners’ on social media as they navigate the minefield of finding themselves solely responsible for the upkeep of a home. Tenants can leave all that to their landlords.

Renting is less of a financial burden. There is often talk about rising rents, but little discussion of the lower costs involved with finding and moving into rented properties compared to the costs of buying. Smaller deposits, no legal fees and no taxes.

Tenancies can be flexible so you’re not tied to a property which is no longer right for you and your circumstances.

Tenants are enjoying increasingly robust legal protections which have the knock-on effect or rooting out unscrupulous landlords, improving the rental experience across the board.

Tenants in private rented accommodation report higher levels of satisfaction than those in social housing.

Given all of these positives, maybe the question should be why not rent?

What does the PRS bring to the housing market?

The PRS, in all its varied forms, brings choice to those seeking a home but not looking to buy

While between them local authority and housing associations control twice the number of rental properties, accessing them can be a time consuming process. Renting in the private sector is quicker and more convenient.

Social sector tenants are also subject to stricter selection criteria, not all individuals seeking a rented property will qualify for a social-rented property, and a lack of properties means that competition is fierce.

For those who need somewhere to live but don’t wish to buy property, the PRS is their best prospect. Lets can be flexible and can be agreed in short order. Tenants can rest assured that landlords, or their agents will take care of the property.

The PRS offers a broader choice of properties, from convenient, functional one-bedroom flats in a city centre through to attractive, detached multi-bedroomed family homes in the leafy suburbs.

Students, young professionals, those moving for work on fixed-term contracts may all find the PRS a better option than social housing or buying a property.

Government and the PRS

Governments have interesting relationships with the PRS. Recently they have appeared to have been more accepting of the importance of the role of the PRS in addressing the housing crisis.

However, that doesn’t prevent them from using the PRS as a cash cow when it suits them – witness the 8% Additional Dwelling Supplement levied on Scottish landlords in the 2024 Scottish budget.

Whilst that applies to anyone purchasing a second (or subsequent) dwelling, the greatest weight falls on the shoulders of landlords. It can be avoided, if you are in the position to buy six or more properties in a single transaction.

Landlords in Scotland own, on average, 1.4 properties, therefore it might fairly be surmised that most of them are not interested in creating large property portfolios, so that exemption benefits only a small subset of landlords.

We understand that for a government, dealing with landlords is a bit like trying to herd cats. There are many thousands of them, hundreds of thousands in Scotland alone (224,354), and they have no single point of contact.

That makes discussions between government and landlords difficult, however we believe that the government needs to find a mechanism to speak to landlords, to seek their views and to understand what they need to succeed.

At present, landlords feel adrift, buffeted by legislation they perceive as imposed on them without a proper understanding of their role or importance.

The future

As a new cohort of MSPs eye the future, what do we want to see from them?

• First and foremost a proper understanding of the role, value and aspirations of the PRS.

• Appreciation of just how important the PRS is in terms of meeting mixed housing needs. As noted above, the flexibility within the PRS is a positive asset which is difficult for other sectors to match.

• Recognise that landlords aren’t ‘house-blocking’. There are many people who choose to rent and the social sector simply cannot cope with that demand – it’s no longer capable of doing so.

• Without suggesting that all landlords are saints, the majority of landlords take their obligations seriously. Happy tenants make for happy and successful landlords – the vast majority know this and strive to make this a reality.

• Introduce a mechanism to communicate with landlords. The Scottish Association of Landlords does a fine job, but doesn’t encompass all landlords.

• Carefully consider how tax policy can hurt or help the sector. The use of tax is nuanced and no one should expect it to be simple, but small changes can make a big difference in encouraging enterprise.

For instance the levying of 8% ADS on the purchase of tenanted properties is a clear disincentive to landlords to protect tenants and protect the supply of rental properties.

NOTE: Propertymark have just published their election ‘manifesto’ ahead of the election, and it’s worth a read, as they have raised some additional issues we haven’t addressed here.

Thoughts from the property pros

The PRS and the landlords behind it have seen a lot of legislation and regulation over the past few years. Some have railed against it and quit, the majority have adapted.

Overall the aim of these changes was to ensure the protection of tenants and to create a more standardised PRS. Unintentionally, this may move the PRS to an even more professional footing.

This traffic however is one-way. ADS for instance is a blunt-instrument used to dissuade professionals from buying property. While the underlying intent is understandable, its execution needs to be more nuanced.

Those who rejoice when a landlord sells up and their properties reach the open market should remember that while house-hunters benefit, tenants lose out – fewer rentals, less choice and rising demand forcing rents up.

Homeownership vs rental properties is not an either/or situation. A healthy housing market should encompass owner-occupied, social rented and private rented properties.

They serve different purposes and address different needs, and home ownership is not the ‘one size fits all’ solution some think it is.

It is up to governments to understand this and to take the necessary steps to ensure that not only are sufficient new properties built, but that the mix within the housing sector best addresses the needs of everyone.

In doing this, they have to ensure that their actions do not unnecessarily disadvantage one sector over the others, not doing so will simply perpetuate the problems we are all dealing with today.

Written by Chris Wood, MD & Co-founder of Portolio, and Ross MacDonald, Director of Sales & Co-founder of Portolio

Get in touch on 07388 361 564 or email to [email protected]